Author: Tridea Partners

Organizations and companies are increasingly using Microsoft Azure Backup to protect physical or virtual machines and data including SQL, Exchange and SharePoint. Traditional tape backups are costly and unreliable, while disk backup solutions have become more affordable and reliable.

You can choose to store backups on a local redundant storage or Geo-redundant storage. Local redundant stores – 3 copies of the backup data within a single facility. Geo-Redundant stores – 6 copies of backups, 3 local and 3 backups in a secondary region. A well planned backup strategy requires careful design, planning, execution and testing to reduce data lost and downtime. Two important elements of a continuity plan are the RPO (Recovery Point Objective – Time between each backup) and RTO (Recovery Time Objective – How long will it take to recover the data).

No additional cost for restore operations or network bandwidth. Data backups are compressed and encrypted to improve faster restore times. Backups are deployed and managed from the Microsoft Azure Portal with several capabilities including monitoring and scheduling.

Other backup solution including Backup Exec, Acronis, Veeam, Dura, EMC, Netback and Yosemite to name a few are available with a variety of options and features.

Everyone using Dynamics AX for inventory should be familiar with the concepts of physical inventory and financial inventory, as well as physical costs and financial costs. When receiving an item against a purchase order or when reporting an item as finished on a production order, the physical quantity is incremented using a physical cost that is understood to be based on incomplete information. Only when invoice matching has been performed against the purchase order can we be assured of having all the necessary information (price revisions, taxes, handling fees, etc.) to replace the original “placeholder” physical cost with the “true” financial cost. In the case of production orders, we need to wait until the production order is “ended” (when no more transactions can be recorded against it) to finally assign the financial cost.

In a similar fashion, when consuming an inventory item (for example on a sales order packing slip or a production order picking ticket), AX assigns a temporary physical cost that will ultimately be replaced with a financial cost that is based on the inventory valuation method selected for the item (FIFO, weighted average, etc.). The physical cost gets replaced by the financial cost only when the transaction is finalized (the ending of the production order or the invoicing of the sales order). Regardless of the inventory valuation method assigned to an item, the physical cost assigned when consuming inventory is always computed using a simple running average. Assuming that the “include physical” checkbox is selected on the Item Model Group, the running average is computed using the following formula: Running Cost Average = (physical amount + financial amount) / (physical quantity + financial quantity).

Many clients are surprised to find that the running average cost of any item can vary significantly from the actual cost of an item, often by much greater amounts than the wildest swings in purchase prices. The explanation is simple, as illustrated by the below example:

Subtract $100 from the physical amount and 10 from the physical quantity; the quantity initially received is no longer a physical quantity, as it has now been invoiced.

Add $110 to financial amount and 10 to financial quantity (per the invoice)

New running average calculation = (-$50 + 110) / (-5 + 10) = $12

The system has calculated a running average cost of $12, even though the only purchase price was for $11.

The reason for this is that we understated the value of the 5 widgets issued to production prior to obtaining the invoice that informed us of the true $11 cost per widget. We brought the 10 widgets in at $110, and issued out 5 of them at $50, so we now have to spread the remaining $60 over the 5 that are still in stock. So the undervaluation of the quantity issued to the production order is offset by the overvaluation of the quantity still in inventory. AX will eventually rectify this only when the production order that consumed that quantity of 5 has been “ended” and the correct financial cost of $11 can be assigned to the quantity consumed. This is because AX does not make adjustments to physical cost transactions, but rather leaves the initial physical cost amount intact until it can be replaced by a financial cost amount.

So, once the production order is ended, the new running average calculation will yield a result of $11, using the following logic:

Add back the -$50 physical amount and physical quantity of -5 (the quantity initially issued as a physical transaction is now issued as a financial transaction)

Subtract $55 from the financial amount and 5 from the financial quantity (the picklist transaction is now a financial transaction)

New running average calculation = ($0 + $55) / (0 + 5) = $11

It is important to point out that AX will ultimately always assign the correct financial cost to each transaction. We just have to recognize that until we can feed the system with all of the necessary data to produce true financial costs, our financials will necessarily reflect these “estimated” costs.

Implementing any ERP system involves getting used to new procedures and learning to navigate throughout the system in the most efficient manner to save you time. Here are some helpful tips and tricks. We share these tips with our clients to allow them to hit the ground running and become quickly accustomed with the Microsoft Dynamics AX Inventory Module!

1. Add in your Inventory dimensions. You can usually find a “Dimensions Display” button is most inventory related areas.

2. I’d also recommend hiding fields you don’t need. You can right click on a field and hit “hide”. Very quick and makes your screen less cluttered.

Now your screen only contains fields that are relevant to the transaction you are performing.

3. You may catch yourself performing inventory transactions that require you to know what’s on-hand right now for a current item. Rather than hop back and forth from the on-hand inquiries screen, you can easily see this information in the transaction. Below I’ve used a movement journal as an example.

I want to move some quantity of an item out of warehouse 24, but I don’t know the total quantity in warehouse 24 off the top of my head. Click the warehouse dropdown and select the on-hand tab to view the available physical quantity.

You can do the same thing on location or batch number if those are inventory dimensions that you use.

This post was written by Laura Garcia, AX Application Consultant at Tridea Partners. Tridea is a leading Microsoft Dynamics provider.